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Every species has the ability to reproduce. Of course, individuals within a species can be born with a mutation that keeps them from reproducing, or lose the ability to reproduce at some point in life. However, to say that once these individuals fail to meet that criteria they are no longer forms of life would be a fairly absurd semantics argument. It might be useful to note in an evolutionary sense that those individuals can no longer pass on their genes, which is could select against whatever it was the resulted in that individual being sterile.

You could probably reword the characteristics of life to stress species instead of individuals, but then theres a problem with microbes which have very poorly, or non-existent species. But in general, this is not something a biologist is going to lose sleep over.